Our water supply 'portfolio'

Commentary

If you're an investor with a diversified portfolio, there's a pretty good chance you have greater peace of mind during an economic downturn than you would if all of your financial eggs were in the same basket.

That simple philosophy - diversification - can save you money and headaches over the long run.

Here at the Castaic Lake Water Agency, we - along with the four Santa Clarita Valley water retailers - apply that philosophy to a resource that's as important as your money, if not more so: your water.

It's no secret California faces significant water supply challenges, not only due to a series of dry winters but also due to ongoing concerns about the availability and reliability of water supplies delivered through the Sacramento-San Joaquin Delta, where aging infrastructure and a court battle over an endangered fish, the Delta smelt, have prompted a legal and legislative debate over how the Delta's water can best be used.

The Delta question is the focus of much debate in the courts and the Legislature but, meanwhile, California residents are being urged to conserve. That goes for SCV residents, too: We're asking local residents to do their part to help the overall statewide water picture by using water wisely.

However, we also have a measure of security here in the SCV that is the envy of others in the state. Simply put, we've saved for a rainy day - or a not-so-rainy one, as it were.

Our water portfolio is indeed diverse, and we have worked hard to secure sources of water that, taken as a whole, can "weather" the fluctuations that typically occur for each individual source of supply.

Unit of currency

Just as you can put money in different types of stocks, bonds or bank accounts as part of an effort to diversify your investment portfolio, we've been "investing" in water from a variety of sources to help ensure that, even in dry years when the State Water Project supply or retailer groundwater production may be reduced, we continue to have a reliable, safe supply of water here in the SCV.

Rather than dollars, water managers' unit of currency is the acre-foot - the amount of water it would take to cover an acre of land one foot deep. Water managers who serve a given area can project approximately how many acre-feet of water it will take to serve their customers in a given year.

For example, in 2008 we expect that the amount of water needed to fully meet SCV needs is about 100,000 acre-feet. Try to visualize that: 100,000 acres of water, one foot deep. Yes, it's a lot of water.

But by planning ahead and diversifying our portfolio, we've got it covered.

There are the two primary sources of water for local residents:

imported water, mostly from the State Water Project, and local groundwater. In plain terms, the State Water Project water comes from northern California through the Delta and the California Aqueduct, which deposits our share of State Water Project water into Castaic Lake. Local groundwater is just that - water derived from two natural underground basins, or aquifers, right here in the SCV.

In 2008, even with court-ordered reductions in the State Water Project pumping from the Delta and modest precipitation in northern California, we expect to receive over 33,000 acre-feet of water from the aqueduct, about a third of what we need.

But that is not all of the State Water Project water available to the Castaic Lake Water Agency. In 2007, the agency actually had more state water available than was used. Unfortunately, we're not collecting interest on the balance. But the good news is we still have that "carryover" water available, sort of like rollover minutes on a wireless phone plan. The carryover adds more than 12,000 acre-feet to our available 2008 supply, bringing our state water total to about 45,000 acre-feet.

We can count on another 42,500 acre-feet from local groundwater supplies. For those of you "auditing" our accounting of supplies, that brings us to almost 88,000 acre-feet - about 88 percent of what is needed to meet projected demand.

Where are we getting the other 22 percent? Simply put, the remaining demand is met as a result of other elements of our diversified water portfolio, created through water acquisition and banking agreements Castaic Lake Water Agency has entered into with other water suppliers.

One of these additional elements of our diversified portfolio is provided through an agreement the agency has secured with the Buena Vista Water Storage District (Buena Vista) and the Rosedale Rio-Bravo Water Storage District (Rosedale-Rio Bravo) in Kern County for another source of imported water. Through this agreement, made in early 2007, Castaic Lake Water Agency receives 11,000 acre-feet of water each year.

What's especially attractive about this particular 11,000 acre-feet is that its availability does not fluctuate as our state water supply does. The water is derived from the Kern River, a separate source altogether. It's like having a portion of your investment portfolio in a reliable bond fund, as opposed to a more variable stock fund.

That's 11,000 acre-feet, plus almost 88,000 from the State Water Project and groundwater, which brings us to approximately 99,000 acre-feet. We're almost there.

'Flexible storage'

Up next is our "flexible storage" account, which has allowed the water agency to store a specified amount of water in Castaic Lake.

Additionally, in 2005 Castaic Lake Water Agency negotiated an agreement with another state water contractor, Ventura County, allowing us to also use its flexible storage account at the lake.

This water was also available in 2007 (and prior years), but we didn't need to use it. We have a total of just over 6,000 acre-feet of water in these accounts.

Let's see ... 99,000 ... plus 6,000 ... carry the one ... and that brings our grand total of available water in 2008 to 105,000 acre-feet. Add in 500 acre-feet of recycled water - a source that will continue to grow over time - and the SCV's total available water supply for 2008 comes to a grand total of about 105,500 acre-feet, more than enough to meet this year's demand.

The good news is the portfolio is performing as we anticipated, which means our diverse water supplies will enable us, in 2008, to meet the water needs of the Santa Clarita Valley without draining our "savings account," or, as water professionals call it, our "dry year" supply.

Our "dry year savings accounts" add up to another 115,000 acre-feet of "banked" water. Water banking is just like your savings account, except when we make a deposit, the water is placed in a much larger storage facility, or "groundwater bank." The water agency has two water-banking agreements with water storage districts outside the SCV.

It's like having a salary of $105,000 a year, and also having $115,000 of savings in the bank. Since our current-year supplies more than meet the demand, we can cover this year's water "expenses" without tapping into the savings account.

That's a good feeling, yes? Considering the challenges of climate change, recent court rulings impacting our State Water Project supply and the need to address infrastructure issues in the Delta, these savings are especially valuable now.

At Castaic Lake Water Agency, we're proud to be able to say the SCV's diversified water portfolio, in terms of both "income" and "savings," is capable of weathering the storm - or, perhaps more appropriately, the lack of one.

But that doesn't mean the agency and the local water retailers can rest on our laurels. To the contrary, we collectively take very seriously our responsibility for continuing to plan ahead. We are expanding our diverse portfolio through imported and local water projects, increased use of recycled water and promoting water conservation to meet demands year in and year out. But we're also asking all SCV residents to ensure they use water as efficiently as possible.

It's just like good financial planning: By saving wisely and spending wisely, we are sure to not run the risk of depleting our "liquid assets."

William Pecsi is president of the Castaic Lake Water Agency Board of Directors. His column reflects the Agency's views, and not necessarily those of The Signal.